Edge n.
1. A thin, sharpened side, as of the blade of a cutting instrument.
2. The degree of sharpness of a cutting blade.
3. A penetrating, incisive quality.
4. A slight but noticeable sharpness or harshness.
5. The line of intersection of two surfaces.
6. A rim or brink.
7. The point at which something is likely to begin.
8. The area or part away from the middle; an extremity.
9. A dividing line; a border.

Friday, January 23, 2009

Right but not Tight!

"What is required of us now," President Barack Obama said in his inaugural address this week, "is a new era of responsibility -- a recognition on the part of every American that we have duties to ourselves, our nation and the world." It is a message that nonprofit organizations would like our nation to take to heart, as 2009 fund-raising begins.

Unfortunately, we nonprofit leaders, like our for-profit counterparts, are laying awake nights. The end of 2008 was disappointing for philanthropy, and some believe that 2009 will be difficult as well. Indiana University's Center on Philanthropy publishes the Philanthropic Giving Index (PGI), which tracks the predictions of nonprofit leaders about charitable giving. Like the more-famous Consumer Confidence Index, it shows a level of gloom not seen in years, falling from 83 to 65 (on a 0-100 scale) in just six months.

The PGI is useful, but it is a blunt tool for predicting charitable giving by individuals or to specific charities. It does not tell us that all nonprofits will experience equal pain. Nor does it tell us that all givers will lower their giving by the same amount. In fact, there is good evidence that some Americans will maintain their giving levels far more than others in spite of the recession. One beleaguered group in particular promises to hold up their charitable end in spite of the sputtering economy: political conservatives.

Over the past several years, studies have consistently shown that people on the political right outperform those on the left when it comes to charity. This pattern appears to have held -- increased, even -- in 2008.

In May of last year, the Gallup polling organization asked 1,200 American adults about their giving patterns. People who called themselves "conservative" or "very conservative" made up 42% of the population surveyed, but gave 56% of the total charitable donations. In contrast, "liberal" or "very liberal" respondents were 29% of those polled but gave just 7% of donations.

These disparities were not due to differences in income. People who said they were "very conservative" gave 4.5% of their income to charity, on average; "conservatives" gave 3.6%; "moderates" gave 3%; "liberals" gave 1.5%; and "very liberal" folks gave 1.2%.

A common explanation for this pattern is that conservatives are more religious than liberals, and are simply giving to their churches. My own research in the past showed that religion was a major reason conservatives donated so much, and that secular conservatives gave even less than secular liberals.

It appears this is no longer the case, however: The 2008 data tell us that secular conservatives are now outperforming their secular liberal counterparts. Compare two people who attend religious services less than once per year (or never) and who are also identical in terms of income, education, sex, age and family status -- but one is on the political right while the other is on the left. The secular liberal will give, on average, $1,100 less to charity per year than the secular conservative. The conservative charity edge cannot be explained away by gifts to churches.

Perhaps you suspect that the vast political contributions given to the Obama campaign -- $742 million, according to the Center for Responsive Politics, versus $367 million for the McCain campaign -- were crowding out charitable giving by the left. But political donations, impressive as they were this year by historical standards, were still miniscule compared to the approximately $300 billion Americans gave charitably in 2008. Adding political and charitable gifts together would not change the overall giving patterns.

But here's where the charity gap really starts to make a difference for the recession of 2009: Conservatives don't just give more; they also decrease their giving less than liberals do in response to lousy economic conditions.

Economists measure the "income elasticity of giving" to predict how much people change their giving in response to a particular percentage change in their income. It turns out the response in 2008 was dramatically different for left and right. For instance, a 10% decrease in family income for a conservative was associated with a 10% decrease in giving. The same income decrease for a liberal family led to a 16% giving drop. In other words, if this relationship continues to hold, the recession will almost certainly exacerbate the giving differences between left and right.

All this is good news for the health and survival of explicitly conservative organizations, of course. But folks on the political right give to all types of nonprofits -- from soup kitchens to symphony orchestras -- not just conservative groups.

Ironically, few environments are less tolerant of conservatives and their ideas than the nonprofit world. The Chronicle of Philanthropy reported in October of 2008 that employees of major charities favored Democrats over Republicans in their private political contributions by a margin of 82% to 18%. Among the employees of major foundations, the difference was an astounding 98% to 2%.

Reasonable people can disagree on politics, but the numbers on giving speak for themselves. Nonprofit executives, disproportionately politically progressive, do well to remember that many of the folks they will count on in hard times are not necessarily those who share their political views. Understanding this might make for better fund raising in a scary year -- and help us all to give credit where it is due.

Mr. Brooks is president of the American Enterprise Institute, and the author of "Who Really Cares" and "Gross National Happiness" (Basic Books).